Calculating Capacity Utilisation

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4 Terms

1
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What us meant by capacity?

The capacity of a business is a measure of how much output it can potentially achieve in a given period

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What are the examples of capacity?

  • A fast-food outlet may be able to serve 1,000 customers per hour

  • A call centre may be able to handle 10,000 calls per day

  • A football stadium could seat no more than 45,000 fans at each match

  • A car production line may be able to complete 50,000 cars per year

3
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What is capacity ultilisation?

The proportion (percentage) of a business’ capacity that is actually being used over a specific period

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What is the capacity utilisation formula?

Actual level of output (units)/ Maximum possible output (units) x 100